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NON-REAL ESTATE LOANS RECEIVABLE

9 Months Ended

Sep. 30, 2025

NON-REAL ESTATE LOANS RECEIVABLE [Abstract]

NOTE 6 – NON-REAL ESTATE LOANS RECEIVABLE

Our non-real estate loans consist of fixed and variable rate loans to operators or principals. These loans may be either unsecured or secured by the collateral of the borrower, which may include the working capital of the borrower and/or personal guarantees. As of September 30, 2025, we had 44 loans with 30 different borrowers. A summary of our non-real estate loans by loan type is as follows:


	As of September 30, 2025
	Weighted		Weighted
	Average		Average Years		September 30,		December 31,
	Interest Rate		to Maturity		2025		2024

					(in thousands)
Working capital loans receivable	9.7	%	0.8	⁽¹⁾	$	59,254	$	57,071
Other loans receivable	10.3	%	3.5	⁽²⁾		382,266		397,998
Non-real estate loans receivable – gross						441,520		455,069
Allowance for credit losses on non-real estate loans receivable						(101,837)		(122,795)
Total non-real estate loans receivable – net					$	339,683	$	332,274

(1)	Consists of revolving working capital loans receivable collateralized by the accounts receivable of the borrower with maturity dates ranging from 2025 to 2029 (with $25.9 million maturing in 2025).

(2)

Consists of other loans receivable with maturity dates ranging from 2025 to 2037 (with $38.8 million maturing in 2025). One of the other notes outstanding with a principal balance of $6.4 million is past due and has been reserved down to the estimated fair value of the underlying collateral of zero through our allowance for credit losses.

For the three and nine months ended September 30, 2025, non-real estate loans generated interest income of $10.4 million and $30.4 million, respectively. For the three and nine months ended September 30, 2024, non-real estate loans generated interest income of $6.3 million and $20.5 million, respectively. Interest income on non-real estate loans is included within interest income on the Consolidated Statements of Operations.

The following is a summary of advances and principal repayments under our non-real estate loans:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024

	(in thousands)				(in thousands)
Advances on new non-real estate loans receivable⁽¹⁾	$	12,012	$	23,456	$	15,891	$	33,856
Advances on existing non-real estate loans receivable		5,107		400		29,689		14,111
Principal repayments on non-real estate loans receivable⁽²⁾		(15,542)		(37,423)		(44,140)		(90,234)
Net cash advances (repayments) on non-real estate loans receivable	$	1,577	$	(13,567)	$	1,440	$	(42,267)

(1)

For the three and nine months ended September 30, 2025, consists of advances under three and seven new non-real estate loans, respectively, that originated during 2025 with weighted average interest rates of 12.8% and 12.1%, respectively. For the three and nine months ended September 30, 2024, consists of advances under four and seven new non-real estate loans, respectively, that originated during 2024 with a weighted average interest rate of 9.9%.

(2)

Excludes principal recoveries on loans written off in prior periods and cash recoveries related to interest payments received on loans that are written down to fair value and are being accounted for under the cost recovery method in which any payments received are applied directly against the principal balance outstanding.

Included below is additional discussion on any significant new loans issued and/or significant updates to any existing loans.

Genesis Non-Real Estate Loans

As discussed in Note 4 – Contractual Receivables and Other Receivables and Lease Inducements, in July 2025, Genesis commenced voluntary cases under Chapter 11 of the U.S. Bankruptcy Code in the Bankruptcy Court for the Northern District of Texas, Dallas Division. As described in Genesis’ filings with the Bankruptcy Court, in July 2025 we agreed to provide, along with other lenders, up to $8.0 million of a $30.0 million DIP financing to Genesis to support sufficient liquidity to, among other things, operate its facilities during bankruptcy. The interim DIP order stated that the loan would bear PIK interest at 15.0% per annum, payable monthly in arrears. However, the final DIP order approved in August 2025 retroactively reduced the PIK interest rate on the entire DIP financing to 14.0% per annum, payable monthly in arrears. The principal is due upon maturity. Currently, the DIP loan matures on the earlier of (i) February 4, 2026, (ii) the effective date of a plan of reorganization or liquidation in the Chapter 11 cases or (iii) upon an event of default as defined in the DIP loan agreement. The DIP lenders hold a third and fourth priority security interest in all of Genesis’ assets, which includes a third priority security interest in cash and accounts receivable, other than (i) certain claims and causes of action arising under the US. Bankruptcy Code and (ii) any causes of action that are not accounts receivable or accounts ((i) and (ii), collectively, “Excluded Claims”). Proceeds of any future asset sales, claims and causes of action other than the Excluded Claims and debt or equity issuances will all serve as collateral for the DIP loans.

As of September 30, 2025, in addition to its DIP financing, Omega has two secured term loans with Genesis totaling $124.7 million in outstanding principal, both maturing on June 30, 2026. Prior to Genesis filing for bankruptcy in July 2025, the two term loans bore interest at a weighted average fixed interest rate of 13.2% per annum, of which 8.2% per annum was PIK interest and 5.0% per annum was cash interest. The interim DIP order approved, as part of the bankruptcy process, the DIP budget which allows interest payments due under the Omega’s existing term loans to be satisfied in kind during the bankruptcy, except for budgeted adequate protection payments that will be applied as interest on one of Omega’s existing term loans. During the third quarter of 2025, we received $0.1 million of adequate protection payments. The two term loans are primarily collateralized by a first priority lien on the equity of several ancillary businesses of Genesis.

As part of our ongoing credit loss procedures, we evaluated the fair value of the collateral available to us under the two term loan agreements and the DIP financings based on current appraisals and market conditions and determined there is sufficient collateral to support the outstanding principal on the loans. Based on our determination regarding the sufficiency of the collateral, the loans remain on an accrual basis. As of September 30, 2025, the internal risk rating on the two term loans and the DIP financing is a 4, which we believe appropriately reflects the risks associated with the loans as of September 30, 2025.